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British Conservatives tackle their fiscal crisis with 'real' magic

By Ruth Marcus
Wednesday, October 13, 2010; A19

I'm not a witch.

But if I were, the first spell I'd cast would be to turn House Minority Leader John Boehner into British Prime Minister David Cameron. Senate Minority Leader Mitch McConnell becomes -- poof! -- George Osborne, chancellor of the Exchequer.

You were hoping for toads?

Tempting, but this would be a better change. The difference between the British conservative leaders and the ones we're stuck with in the United States is the difference between rational conservatism and magic-wand conservatism.

I'm not a Tory. But listening to Cameron's speech at the Conservative Party's annual conference, I was bowled over.

First, instead of conjuring up sugarplum visions of pain-free change, the Conservatives are addressing their fiscal crisis with seriousness and specificity. Osborne is about to unveil an austere deficit-reduction plan that will cut most departmental budgets by 25 percent over several years. This is not some dead-on-arrival presidential budget; the parliamentary system means that these are for-real cuts.

You can argue whether this is the right approach in a wobbly economy or whether these cuts are too draconian, but it takes guts to spell them out. Compare this with House Republicans' laughable "Pledge to America," which could manage to summon up just two measly trims: cutting Congress's budget (all legislative branch spending totals less than $4 billion) and freezing the size of the federal workforce (it's smaller now than it was in 1967).

Second, the Conservatives call for shared sacrifice, starting in a place Republicans seem never to look: at the top. "It's fair that those with broader shoulders should bear a greater load," Cameron said.

As the conference opened, the Tories announced, to much howling from their own members, that higher earners -- those making more than about $70,000 a year -- would no longer be entitled to automatic child benefits, under which a family with three children receives close to $4,000 annually.

"Believe me, I understand that most higher rate taxpayers are not the super-rich," Osborne said. "These days we've really got to focus the resources where they are most needed." Here in the United States, when Democrats dare to propose higher taxes for households making more than $250,000 a year, Republicans shout "class warfare."

Third, the Conservatives do not embrace the Tea Party vision of government as malevolent force. "I don't believe in laissez-faire," Cameron said. "Government has a role not just to fire up ambition, but to help give it flight."

He ticked off examples: a Green Investment Bank, infrastructure projects such as high-speed rail and super-fast broadband, even "a New Enterprise Allowance that gives money and support to unemployed people who want to start their own business."

Hard to imagine the party that balked at extending unemployment benefits doing anything like this. While Republicans complain about socialized medicine that is anything but and vow to dismantle health reform, their Tory counterparts have promised to spare the National Health Service -- their actually socialized medicine -- from cuts.

Fourth, Cameron's Conservatives do not suffer from the Republicans' anaphylactic allergy to taxes. While Republicans insist on extending the Bush tax cuts for the wealthiest Americans, the Conservatives have endorsed tax increases. Yes, you read that right -- even though the tax burden is already significantly higher in the United Kingdom.

The Conservatives' deficit-

reduction package envisions making up one-fifth of the shortfall by raising taxes. The value-added tax will go from 17.5 percent to 20 percent. The capital gains tax will increase from 18 percent to 28 percent for high earners because, as Osborne said, sounding more like Warren Buffett than Margaret Thatcher, the rich are "paying less tax than the people who clean for them."

Fifth, and this may be the result of their falling short of an outright majority and the resulting coalition with the Liberal Democrats, the Tories seem to understand that politics can be a matter, as Cameron put it, of "reasonable debate, not tribal dividing lines."

The prime minister pointed to a referendum planned for next year on electoral reform -- a measure that Conservatives oppose. "Let's not waste time trying to wreck the bill," he said. "Let's just get out there and win the vote." This sounds just like the congressional Republican approach, no?

Granted, the United Kingdom and United States have different political systems and political cultures. But oh for a Republican Party that sounded anywhere near so sensible. Alas, it will take more than eye of newt -- or is that eye of Newt? -- to accomplish that magic.

ruthmarcus@washpost.com

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